Q: As a business owner, I'm always looking for opportunities to raise capital to grow my business. Are there any new opportunities that I need to know about
A: As a business owner, it is important to ask the capital question to determine the short- and long-term prospects for your business venture and the potential need for funding. To answer that question,you first need to assess the type of business you are in, the amount of investment you are making and the prospects for rapid growth.
Once an evaluation is made, it is time to look for capital sources. Private capital is the key driver in any capital structure scenario. Banks and certified development companies provide commercial loans, Small Business Administration guaranteed loans, and U.S.Department of Agriculture guaranteed loans. For high growth ventures, angel investors typically drive early capital along with the entrepreneurs' own investment and are at the forefront of business expansion.
Are there additional opportunities to raise capital? The answer is yes. But in almost every scenario possible, it begins with a financial institution or angel investors saying yes. Often, that's where the additional opportunities start.
In the state of Kansas, there are multiple organizations - local, state and federal - that provide subordinate debt (after private capital) and additional equity capital, effectively multiplying the amount of capital available to your business.
The newest opportunity: The State Small Business Credit Initiative is designed to expand capital by providing gap financing for small businesses throughout the country. Kansas and Missouri both received early approvals from the U.S. Treasury for new programs designed specifically to multiply the private capital that your business secures. NetWork Kansas in partnership with the Kansas Department of Commerce recently launched the Kansas Capital Multiplier Loan and Venture Funds. Missouri has launched similar loan and venture programs.
The path to raising capital can sometimes appear like a maze that has a starting spot but no end in sight. But if you start with the basics (what is my business, how fast can I grow, and how much do I need), then use your existing funding network, programs likethe Kansas Multiplier Loan and Venture Funds can become a strategic advantage.
For more on Kansas programs, visit www.networkkansas.com.